MAS 1MDB probe: Summary of Regulatory Actions taken

Update 20 Dec 2017 – MAS issued Prohibition Orders to Mr Yeo Jiawei and Mr Kevin Scully and has been updated below.

SINGAPORE – The central bank of Singapore, Monetary Authority of Singapore (MAS), announced that it had concluded its review of transactions relating to the 1MDB scandal on 30 May 2017. In the same announcement, MAS mentioned that this supervisory review is the most extensive it has ever taken yet.

The review included detailed onsite inspections, offsite examination and analysis of information obtained from the financial institutions (FIs) and foreign regulators, and close coordination with the Attorney-General Chambers and the Commercial Affairs Department. A complex web of transactions involving individuals and shell companies operating in multiple jurisdictions was uncovered during the review.

Withdrawal of License

BSI Bank – On 24 May 2016, MAS withdraws BSI Bank’s merchant bank status in view of:

• Serious breaches of anti-money laundering (AML) requirements
• Poor and ineffective oversight by the senior management of BSI Bank
• Blatant disregard for compliance and control requirements as well as having unacceptable risk culture
• Gross misconduct by staff

Falcon Bank – On 11 Oct 2016, MAS withdraws Falcon Bank’s merchant bank status in view of:

• Failure to guard against conflict of interest when managing the account of a customer who was associated with the bank’s former Board Chairman
• Improper conduct of key senior staff which led to the contribution towards breaches of AML regulations
• Severe lack of understanding of MAS’ AML requirements and expectations

Financial Penalties

BSI Bank – On 24 May 2016, fined $13.3 million for 41 breaches of MAS Notice 1014 and a further 95 million Swiss Francs by Swiss financial watchdog Finma.

Falcon Bank – On 11 Oct 2016, fined S$4.3 million for 14 breaches of MAS Notice 1014 and a further 2.5 million CHF Swiss Francs by Finma.

DBS Bank Ltd – On 11 Oct 2016, fined S$1 million for ten breaches of MAS Notice 626 for:

• Deficiencies in on-boarding of new accounts
• Weakness in corroborating the source of funds
• Inadequate scrutiny of customers’ transactions and activities
• Failure to file timely suspicious transactions reports (STRs)

UBS AG, Singapore Branch – On 11 Oct 2016, fined S$1.3 million for 13 breaches of MAS Notice 626 for:

• Deficiencies in on-boarding of new accounts
• Weakness in corroborating the source of funds
• Inadequate scrutiny of customers’ transactions and activities
• Failure to file timely STRs

Standard Chartered Bank, Singapore Branch – On 2 Dec 2016, fined S$5.2 million for 28 breaches of MAS Notice 626 for:

• Significant lapses in the bank’s customer due diligence (CDD) measure
• Major lapses in controls for ongoing monitoring
• Inadequate policies and procures
• Insufficient oversight of front office staff
• Lack of awareness of money laundering risks

Coutts & Co Ltd, Singapore Branch – On 2 Dec 2016, fined S$2.4 million for 24 breaches of MAS Notice 1014 for:

• Breaches in AML requirements concerning CDD measures for politically exposed persons (PEPs)
• Failure to exercise necessary enhanced CDD on PEP accounts was the result of actions or omissions of individual officers

Credit Suisse – On 30 May 2017, fined S$0.7 million for seven breaches of MAS Notice 626 for:

• Weakness in CDD on customers
• Inadequate scrutiny of customers’ transactions and activities

United Overseas Bank – On 30 May 2017, S$0.9 million for nine breaches of MAS Notice 626.

• Weakness in CDD on customers
• Inadequate scrutiny of customers’ transactions and activities

Regulatory Actions against Individuals

As reported by MAS, these individuals were served with the following penalties:

Tim Leissner, former Chairman of Goldman Sachs (Southeast Asia)

• Issued a 10-year Prohibition Order (PO) with effect from 13 March 2017.
• Was found to have issued an unauthorised letter to a financial institution based in Luxembourg and to have made false statements on behalf of Goldman Sachs (Asia) L.L.C. without the firm’s knowledge.

Yak Yew Chee, former Managing Director of BSI Bank

• Sentenced to 18 weeks’ jail and a fine of S$24,000 on 11 November 2016 after pleading guilty to four charges (for forging reference letters to misrepresent or conceal the net worth of Low Taek Jho (“Jho Low”) and for failing to report suspicious movement of funds by Jho Low), with three other charges taken into consideration.
• Issued a lifetime PO with effect from 29 May 2017.

Seah Mei Ying (formerly known as Seah Yew Foong Yvonne), former Director of BSI Bank

• Sentenced to 2 weeks’ jail and a fine of S$10,000 on 16 December 2016 after pleading guilty to three charges (for intentionally aiding Yak Yew Chee to forge reference letters to misrepresent Jho Low’s net worth or conceal the source of Jho Low’s fund transfers, and for failing to report suspicious movement of funds by Jho Low), with four other charges taken into consideration.
• Issued a 15-year PO with effect from 29 May 2017.

Jens Fred Sturzenegger, former Branch Manager of Falcon Private Bank Ltd, Singapore Branch

• Sentenced to 28 weeks’ jail and a fine of S$128,000 on 11 January 2017 after pleading guilty to six charges (for consenting to Falcon Bank’s failure to file suspicious transaction reports, for failing to disclose information on suspicious outflows from Falcon Bank, and for furnishing false information to MAS and CAD), with 10 other charges taken into consideration for sentencing.
• Issued a lifetime PO with effect from 29 May 2017.

Ang Wee Keng Kelvin, former remisier at MayBank Kim Eng Securities Pte Ltd

• Sentenced to a fine of S$9,000 on 24 May 2017 after pleading guilty to an offence under section 6(b) of the Prevention of Corruption Act for bribing Lee Chee Waiy, former Head of Research of NRA Capital Pte Ltd (“NRA”), with S$3,000 to expedite the preparation of the valuation report on PetroSaudi Oil Services Limited (“PSOSL”).
• Served a Notice of Intention (NOI) to issue a six-year PO.

Lee Chee Waiy, former Head of Research at NRA

• Received a $3,000 bribe from Ang Wee Keng Kelvin, to expedite the PSOSL valuation, and applied an inappropriate methodology and assumptions in the valuation of PSOSL.
• Served an NOI to issue a six-year PO.

Scully Kevin Norbert, CEO at NRA

• Failed to ensure that his analyst, Lee Chee Waiy, had exercised sufficient care, judgment and objectivity in the valuation of PSOSL.
• Served a NOI to issue a three-year PO.
• Update 20 Dec 2017 – Three-year PO issued with effect from 18 Dec 2017.

Yeo Jiawei, former Wealth Planner at BSI Bank

• Sentenced to 30 months’ jail on 22 December 2016 for four charges of witness tampering in the 1MDB-related investigation.
• Facing seven charges pending before the Court: 4 charges of cheating relating to his failure to disclose kickback arrangements to BSI Bank, two charges for money laundering offences, and one charge of forgery relating to an unauthorised reference letter.
• Update 20 Dec 2017 – Lifetime PO issued with effect from 18 Dec 2017.

1MDB Review Conclusion

Mr Ravi Menon, Managing Director of MAS, said,

The two-year long 1MDB-related review holds key lessons for both MAS and financial institutions in Singapore. MAS has enhanced its AML surveillance and taken unprecedented enforcement actions against errant institutions and individuals. Financial institutions have increased their risk awareness and strengthened their AML controls. Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place. The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance.

1MDB-related probe: How things unfolded in Singapore https://t.co/W0zweHsPjF

— AML/CFT (@amlcftrisk) June 1, 2017